SEC Charges Mayor of Beaufort, S.C., With Insider Trading in Stock
of Biotech Company

WASHINGTON, July 16, 2008 — The Securities and
Exchange Commission today charged the mayor of Beaufort, S.C., with
insider trading on non-public information that he obtained while
doing consulting work for a California biotechnology company.

The SEC alleges that Mayor William J. Rauch purchased stock in
Advanced Cell Technology, Inc., immediately after one of its
executives informed him about a breakthrough embryonic stem cell
technique that the company was about to disclose publicly.
According to the SEC's complaint, Rauch was told the information
was confidential, and he had previously signed an agreement with
the company that barred him from using confidential company
information for his own benefit. Rauch has agreed to settle the
SEC's charges without admitting or denying the allegations.

"This case underscores how important it is for consultants
provided with non-public information to be mindful of the duties of
confidentiality owed to companies that hire them," said Marc J.
Fagel, Regional Director of the SEC's San Francisco Regional
Office.

The SEC's complaint, filed in federal court in San Francisco,
alleges that an Advanced Cell Technology executive told Rauch on
Aug. 3, 2006, that a science journal would soon be publishing an
article reporting Advanced Cell's development of a new technique
for creating stem cell lines without harming embryos, which the
company believed might alleviate concerns about stem cell
technology.

According to the SEC's complaint, Rauch called a securities
broker and opened accounts in his name and his children's names on
the same day he received the confidential information. On August 9
and 14, after further discussions with the Advanced Cell executive,
Rauch telephoned his broker and purchased more than $11,000 of
Advanced Cell stock in his children's accounts. On August 23,
Advanced Cell publicly announced its embryonic stem cell
development, and its stock price jumped 360 percent from $0.40 to
$1.83 per share. The stock price declined to $0.96 per share on
August 25, still 140 percent above the price just before the
announcement. Even with the price decline, Rauch's potential profit
on his stock purchases two weeks earlier, had he sold, was more
than $20,000.

Without admitting or denying the SEC's allegations, Rauch has
consented to an injunction barring future securities law violations
and has agreed to pay $20,708 in disgorgement, $2,576 in
prejudgment interest, and a $20,708 penalty.

The SEC acknowledges the assistance of the Financial Industry
Regulatory Authority (FINRA) in this matter.

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